Finance Minister Pranab Mukherjee presented Union Budget 2012, the 81st Budget in India's history. Individually, this was Mukherjee's seventh annual Budget, second-highest by any Finance Minister. But still he missed the basic ingredients required for the growth. Instead of development path he has opted for the inflationary tools to get higher GDP numbers. The economy has been battling double digit inflation for two years.
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Increase in indirect taxes and reduction in provision of subsidy for petroleum products would infuse price escalation. His efforts to tap Rs 60,000 crore through tax free bonds will only lead to problems of the future FMs.
GDP growth in 2011-12 is estimated at 6.9 per cent; : GDP growth rate pegged at 7.6% in 2012-13. According to FM economy is now turning around and recovery in core sectors is visible.
Below are the key highlights of Union Budget 2012:
- Exemption limit for the general category of individual taxpayers enhanced to Rs 2,00,000. This results into
- A relief of Rs.2,000 for all assesses;
- The slab of 20 per cent tax on income is changed from Rs 5 Lakh to 8 lakh bracket to Rs 5 Lakh to 10 Lakh, This will bring down the tax burden by another 10% on the income above Rs 8 lakh with maximum upto Rs 20,000.
- For over Rs 10 Lakh income 30% Tax slab would be applicable.
- Another relief has come via deduction of up to Rs.10,000 from interest from savings bank accounts.
- A new feature added is Rajiv Gandhi Equity Saving Scheme to allow income tax deduction to retail investors in stocks upto Rs 50,000 for individuals having income below Rs 10 Lakh per annum.
- Securities Transaction Tax on cash delivery reduced by 25% to 0.1%.
- Standard rate of excise duty and Service Tax is to be raised from 10% to 12%
- Excise duty on large cars also proposed to be enhanced. Large cars, imported bicycles, cigarettes, bidis and some imported jewellery to cost more.
- Branded silver jewellery may get cheaper.
- No change is proposed in the peak rate of customs duty of 10 per cent on non-agricultural goods. No change in corporate tax rate.
- Indirect taxes estimated to result in net revenue gain of `45,940 crore. Service tax rate raised from 10 per cent to 12 per cent to bring in Rs.18,660 crore. Farming for growth:
- Target for agricultural credit raised to Rs5,75,000 crore; Interest subvention for short-term crop loans to farmers at 7% interest continues; additional 3% for prompt paying farmers.
- Fiscal deficit targetted at 5.1% of GDP in 2012-13, down from 5.9% in 2011-12
- Central Government debt at 45.5% of GDP.
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